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Church,
Inc.
By
john o’keefe
I
am not sure I fully understand the reason why churches
seek a “legal status?”
I mean, in all areas of the church it is
explained how important this ides of “Church, Inc”
is to the church in general.
We, as a community of faith, have found it more
important to have a “constitution” and “by-laws”
and that ever-popular 501(c)3 status then to live out
the biblical mandate of helping people find a
relationship with the God who loves us.
The problem with all three of those is that, I
believe, they have taken away “the church” (little c
and universal) and replaced it with “the Church”
(big C and incorporated).
While I will agree that there may be some
benefits to being a “corporation,” I believe there
can be more problems for us in the long run.
But we still need to ask, what they are?
We hear the term “nonprofit” and
“corporation” all the time.
Yet, what are they?
What is a “nonprofit” and what is
“incorporation?”
In our “post-denomination” world is
incorporation needed to truly be a community?
Is there a natural tension between “community
church” and “corporate church” that we can live
with a “biblical community of faith?”
Webster
defines a corporation as "A body formed and
authorized by law to act as a single person, and endowed
by law with the capacity of succession."
A “nonprofit” is a corporation that by law
must use the “excess” (what nonprofits call
“profit”) for public interest.
Generally speaking the purpose of a
“nonprofit” organization must be charitable,
educational, scientific, religious or literary. I will
admit that this is a common and broad definition that
fits many organizations.
But you need to keep in mind that there are 26
types of nonprofits defined in the IRS code.
Some
Bennies:
We
all like the bennies.
As a people in America we love our bennies –
extra days off, employer paid medical, paid vacations,
short work days – we just love the bennies.
I have a friend who turned down a great job with
a great company making great money because the
“bennies” were not what he wanted.
We love the bennies.
What “benefits” does having all that give the
church? Let’s
look at the three areas – a “constitution” and
“by laws” and the 501(c)3 status.
The
primary benefit of incorporating a church is the legal
idea of “limited liability.”
It says that as a “office” you are not liable
for the mistakes you make in the company as long as you
avoid personally guaranteeing the obligations.
The church, and not you, would be solely
responsible for the obligations.
This “move” protects your personal assets
from creditors if the church goes belly up, even if it
is mismanaged. But
there are other “smaller” benefits received.
A second benefit is that the Church gets a
“continuous life.” That’s right, as a corporation the Church can live forever.
When the Church is a corporation it can survive
its founders. Providing
or course, it complies with ongoing (and changing) state
and federal laws that govern what a corporation can and
cannot do, all paperwork is in order, and it pays the
annual filing fees.
A third benefit is that a Church gets a
“corporate identity.” If the name of your church is “The Only True Church of Mud
Land” then no other church in the state you are
incorporating in can take that name.
For all “legal” purposes you are “the only
true church of mud land.”
This leads to a fourth benefit that is connected
to the third, you get a “corporate image.”
The Church gets a sense of image, stability,
sophistication, credibility, and permanence results from
incorporating; after all, you are no longer “the
church” you are now “The Church.”
A fifth benefit that comes, comes more for the 501(c)3
status then
from the individual state. That benefit is, not paying taxes and your people can take
what they give you off their taxes as a deduction.
Sure, these are cool bennies, but there are also
probs that need to be seen as well.
Some
Probs
One
of the biggest problems I see is that we count so much
(too much) on this idea of “tax deductions” and not
paying taxes based on the collections of the church.
In my opinion this is a huge problem that is not
guaranteed to last forever.
Here’s a question I think needs to be answered
and I think this question is the “pink elephant” in
the room no one is looking to address.
Here is it, “if the IRS removed the deduction
for churches how many of the people in your church would
still give?”
The
scenario:
One
day your sitting in your mega-church office and the IRS
sends you a registered letter saying:
Dear
Pastor Big Church,
We
are writing you, and all churches in the area, to inform
you that starting immediately all churches are having
their tax-exempt status removed.
Starting immediately, all Churches will start
paying income taxes on all collections, offerings and
tithes and other incomes. Starting immediately the IRS will be defining “offering,”
“collections,” “tithing” and other forms of
income to the church as “Income” to the church and
is subject to the respective corporate income tax rate.
Also,
no contributor to that income may take as a deduction on
his or her Federal Income Tax Forms.
We will be making a wider press release
concerning this change in policy, but wanted to send
this letter to Churches so they could announce from the
pulpit….
What
do you do? What
happened to the plate?
Do you think your people will give over pocket
change to the offering?
Many will say, “This is impossible, we have a
separation of church and state.”
Really, as a “corporation” the church serves
at the whim and will of the state; the state controls
all areas of how a corporation is, and is not, taxed and
governed. Keep in mind, the church was not included in the 501(c)3
status, until 1954.
The tax-exempt status is granted to the church
based on “codes” not on any other reasoning.
All that need happen is codes change.
In
my opinion, I think tax deductions have changed the way,
and the reason, many people in the church give – oh,
sure we talk about giving because God wants us to –
about giving because God loves a cheerful giver – but
in reality, many of the people who give (tithe or more)
in our churches do so because of the benefit of
tax-deduction. If
you think not, ask yourself – what was your reaction
to the above letter?
Was your first reaction that giving would drop?
Try this, at the next board meeting let them know
that you believe the church needs to pull away from the
“501(c)3 status” and lose the exempt status, making
the gifts non-deductible.
What would happen?
I can guess.
What would happen if you suggested that the
church pay State and Federal income taxes?
What do you think the response will be?
If we say we give because we love God, and the
tax break was removed, would we give the same amount?
The
idea that the church does not desire to lose the
deduction of gifts is interesting, because that leads to
what I believe is a second problem; the reality that we
are being controlled .
Whether you agree or not, the corporate church is
guided by laws that can, and will, mandate teachings and
structure. Any
corporation operates at the will and benefit of the
government and not for the benefit of the organization.
If the government determines that certain speech
is considered insightful and harmful to the general
public then it can outlaw that speech.
If the government determines that certain hiring
practices violate certain laws, then those laws must be
obeyed. One
needs to keep in mind that all corporations and laws
governing a corporation (even nonprofit corporations)
are at the whim of the lawmakers.
I
know I am going to be pulled over the glass on this one
but where is congregational voting in scripture? When the Disciples were replacing Judas, they cast dice to
see who would be selected – they did not leave it up
to a vote of the congregation.
When they needed to find people to care for the
widows and orphans the Disciples told them to select
among themselves (selection among the deacons) people to
do the job – not have a vote to determine who would do
it. No
place in scripture is a “vote” needed to do
ministry, share the gospel, or determine the style of
worship or determine the direction of the church.
I think the idea of a “congressionalist
church” is seen in the corporate structure of
“shareholders” – the idea that “we own the
church” – and I have heard that one before.
The Church, the “corporate” reality of that
church, says that “if we do important things, we
vote” – why? Is
it biblical? Is it cultural?
It seems silly to vote over issues; to me it
shows a lack of trust in leaders, not in any scriptural
guide. This
idea of the “corporation church” gives birth to a
natural stagnation in growth and ministry.
I believe the “one member, one vote” has its
roots, like most things in the Church, in rebellion and
a reaction to what it saw as a perceived injustice of
the clergy, not in scripture.
In my view, the church saw the corporate model as
a way of making changes. This idea created a corporate mindset that overrides, I
believe, in the minds of many in the church the desire
to be scriptural with the reality of being more
legalistic.
I
am amazed at the number of Churches that when confronted
with an issue quickly run to their respective by-laws,
constitution, denominational disciplines.
I remember recently being involved with a church
that was having a hard time with one of the members.
In a meeting it was decided that they would ask
this member to leave the church.
In the meeting they kept talking about the
by-laws of the church and what they said they needed to
do to remove the member.
When I insisted on following the teachings of
Jesus as recorded in Matthew, you would have thought
that I suggested we follow some kind of weird rule.
The idea is that “the by-laws say this and we
must follow that” – I am amazed at having to fight
to follow a biblical principle, over a human principle.
Besides, many of the by-laws of churches are
based so much on past hurts that they are impossible to
read.
The
Consequences of Our Actions:
I
believe that the consequence of our corporation actions
is that when we think in terms of corporations,
liabilities, assets and income we tend to walk away for
them idea of community.
I wonder how hard it would be today to start many
of the church (community) ministries of the past.
Could we form a hospital out of nothing?
Could we form a ministry that did not concern
itself with liabilities and “protecting” it’s
assets. When
given the possible to form and outreach but because it
might cause a lawsuit, or lose of income, or lose
“exempt status,” or lose of “respect” with other
ministries we do not form that ministry we must admit
that we are more concerned with the corporation then the
community. I
mentioned this to a friend once and needless to say he
disagreed with me.
It seems his idea is that it is better to do safe
ministries that won’t get us sued, then to do
“edgy” ministries that will get us sued.
For me, I don’t see it that way, because I see
“edgy” ministry is the ministry we are called to be
doing. I
think if we back down and not reach out because we fear
losing things, we end up losing people – and in my
view losing things is not as important as losing people.
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